Leading Investor Shifts Focus to AI: Halvorsen’s Bold Move

The investment community eagerly awaits a particular filing every quarter that reveals the latest moves of top investors. A few weeks ago, institutional investors managing at least $100 million filed their 13F forms with the Securities and Exchange Commission (SEC). These forms detail the latest buys and sells of these expert investors, along with their current holdings.

Why does this capture attention? The 13F filings offer inspiration for our own portfolios as we look for investment opportunities. Billionaires, like all investors, don’t always succeed with every stock pick. However, their significant track records of success often make their moves worth studying—and sometimes following.

Halvorsen Makes a Big Play in AI

In the most recent quarter, billionaire Ole Andreas Halvorsen made a noteworthy decision in the rapidly growing area of artificial intelligence (AI). He sold all his shares of Broadcom (NASDAQ: AVGO) and invested heavily in this year’s top performer on the Dow Jones Industrial Average. Let’s unpack this move to see if it aligns with your investment strategy.

Image source: Getty Images.

A Closer Look at a Top Investor

Let’s examine Halvorsen’s credentials. Leading Viking Global Investors, he manages over $27 billion in securities that fall under 13F reporting requirements. Known as a “tiger cub,” he worked at Julian Robertson’s Tiger Management before establishing Viking in 1999.

During the third quarter, Halvorsen’s team made 23 new purchases and increased 21 existing positions. However, they also sold out of 22 stocks and reduced holdings in 26. Though they leaned toward selling, the extent was not drastic. It’s essential to note that selling can sometimes aim to lock in profits rather than signal a loss of faith in a company or the market.

Focusing on Halvorsen’s transition, he completely sold his shares in Broadcom, a company crucial to internet infrastructure, where about 99% of today’s Internet traffic relies on its technology. Having bought the shares in the second quarter, Halvorsen did not hold them long-term. Still, he benefited from Broadcom’s 30% rise from the beginning of the second quarter to the close of the third quarter.

New Player in the Dow Jones

Instead, Halvorsen has turned his attention to another AI contender, Nvidia (NASDAQ: NVDA), which recently joined the Dow Jones. In the third quarter, Halvorsen increased his Nvidia stake by 63%, indicating his belief in the company’s potential for further growth. Like Broadcom, Nvidia represents a recent addition to Halvorsen’s portfolio, having first been purchased in the second quarter this year.

Should you consider Nvidia over Broadcom? This depends on your investment style. Broadcom is trading at 28 times forward earnings estimates, significantly cheaper than Nvidia’s 47 times. Also, Broadcom stands to gain from the AI market’s growth—analysts project the $200 billion AI market will balloon to $1 trillion by 2030.

Despite its considerable rise of 180% this year, Nvidia remains attractive for those wanting high-growth AI investments. Nvidia dominates the AI chip market and is poised for continued leadership thanks to upcoming innovations, including the new Blackwell architecture, set to launch soon.

Both stocks offer compelling opportunities in the AI space. However, high-growth investors might gravitate toward Nvidia, aligning with Halvorsen’s strategic move.

Strategic Investment Tips

When our analyst team shares stock tips, it’s wise to listen. The Stock Advisor has achieved a total average return of 916%—significantly surpassing the S&P 500’s 177% return.*

They have recently identified the 10 best stocks for investors to consider right now…

See the 10 stocks »

*Stock Advisor returns as of December 9, 2024

Adria Cimino has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Nvidia. The Motley Fool recommends Broadcom. The Motley Fool has a disclosure policy.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.